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1. A fast-food restaurant asks customers to evaluate the drive-thru service as good, average, or poor. What level of data measurement is this classification?

Nominal

Ordinal

Interval

Ratio

2. In order to determine the average amount spent in November on Amazon.com a random sample of 144 Amazon accounts were selected. The sample mean amount spent in November was $250 with a standard deviation of $25. Assuming that the population standard deviation is unknown, what is a 95% confidence interval for the population mean amount spent on Amazon.com in November?

3. A shipment of 20 DVDs has arrived at a video rental store. Based on past experience, the manager knows that 10% of all new DVDs sent to the store have a visible defect. The manager tells you to begin inspecting the new DVDs one at a time at random until you find the first DVD that has a defect. If 10% of the DVDs have a visible defect in the new shipment, what is the probability that the first DVD that has a defect is the 3rd one that you inspect? (Round your answer to 3 decimal places.)

.081

.268

.089

.716

4. An insurance agent has selected a sample of drivers that she insures whose ages are in the range from 16–42 years old. For each driver, she records the age of the driver and the dollar amount of claims that the driver filed in the previous 12 months. A scatterplot showing the dollar amount of claims as the response variable and the age as the predictor shows a linear regression line with: y^=3710 – 55.4x. If the age of a driver increases by 1 year, by how much and in what direction would the dollar amount of claims be predicted to change for the driver?

Increase by 55.4 dollars

Decrease by 55.4 dollars

Increase by 3710 dollars

Increase by 3,654.6 dollars

5. A researcher claims that the proportion of employees who play video games in the workplace is higher than it was 10 years ago. You might be willing to reject the null hypothesis of no change with a = 0.10 or larger. The p-value for this test is 0.15. In this case the researcher should

14. The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $35,700 for FIFO and $29,400 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO?

$9,000

$12,600

$1,800

$6,300

15. The Sarbanes–Oxley Act of 2002 requires publicly traded U.S. companies to take the following actions to defect and prevent fraud:

Adopt accrual basis of accounting, maintain an adequate system of internal controls, and create penalties for noncompliance

Maintain an adequate system of internal controls, ensure that internal controls are reliable and effective, and hire independent auditors to attest adequacy of internal controls

Ensure internal controls are reliable and effective, corporate executives must independently review internal controls, and submit all financial statements to the Public Company Accounting Oversight Board

Maintain an adequate system of internal controls, provide additional training to managers and accountants regarding internal controls, and publish internal controls on the company’s public website

16. On July 1, 2014, Linden Company purchased the copyright to Norman Computer Tutorials for $140,000. It is estimated that the copyright will have a useful life of 5 years. The amount of amortization expense recognized for the year 2014 would be

17.ABC Corp. receives a 7-month interest-bearing promissory note in the amount of $360,000 on February 1. The interest rate is 15%. What is the total interest expense ABC Corp will record assuming ABC makes all of its payments?

$54,000

$31,500

$4,500

$36,000

18. Logan Corporation issues 50,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to cash for $3,000,000 and a credit or credits to

preferred stock of $3,000,000

preferred stock for $2,500,000 and paid-in capital in excess of par value—preferred stock for $500,000

preferred stock for $2,500,000 and retained earnings for $500,000

paid-in capital from preferred stock for $3,000,000

19. Which of the following tools of analysis is used to evaluate financial statement information by expressing financial statement data as a percentage over a base amount?

Vertical analysis

Horizontal analysis

Ratio analysis

Industry averages

20.The Sarbanes–Oxley Act of 2002 requires publically-traded U.S. companies to provide great internal controls. The five primary components of an internal control system include: a control environment, risk assessment, information and communication, monitoring, and

1. Compared with other approaches to business, the marketing concept is distinct in that it

focuses on sales

produces new products and services

creates a broad assortment of products

focuses on satisfying customers' needs

2. A company provides its advertising agency with a statement about a new product to use in designing an advertising campaign, and this statement includes a description of the target market, the product type, the primary benefits of using the product, and how this product is different from, and better than, competitive products. What type of statement is this?

3. The sales analysis of a product revealed that profits were highest when it was initially introduced into the market with a high selling price. However, the price was gradually reduced as it started facing competition as substitutes entered the market. This is an example of a(n)

introductory price dealing

temporary price cut policy

skimming price policy

penetration price policy

4. Blending the firm's promotion efforts to convey a complete and consistent message is the goal of

sales management communications

sales promotion communications

integrated promotional marketing

integrated marketing communications

5. According to the concept of social responsibility, a firm has a duty to

communicate regularly with the public

place profit above all other considerations

place customer satisfaction above all other considerations

conduct business in a way that is good for society as a whole, both now and for the future

7. You just purchased a parcel of land for $10,000. If you expect a 12% annual rate of return on your investment, how much will you sell the land for in 10 years? Note. Due to rounding and method of calculation, your answer might vary slightly. Choose the closest answer.

$25,000

$31,060

$38,720

$34,310

8. Bull Gator Industries is considering a new assembly line costing $6,000,000. The assembly line will be fully depreciated by the simplified straight line method over its 5-year depreciable life. Operating costs of the new machine are expected to be $1,100,000 per year. The existing assembly line has 5 years remaining before it will be fully depreciated and has a book value of $3,000,000. If sold today the company would receive $2,400,000 for the existing machine. Annual operating costs on the existing machine are $2,100,000 per year. Bull Gator is in the 46 percent marginal tax bracket and has a required rate of return of 12 percent. Calculate the net present value of replacing the existing machine. Note. Due to rounding and method of calculation, your answer might vary slightly. Choose the closest answer.

$816,000

$382,320

$2,941,680

$-382,320

9. A strong stock market and reasonably good earnings have caused the price of the firm's common stock to increase by 25%.

This will have no effect on the firm's cost of capital.

All things equal, this will increase the firm’s cost of capital.

All things equal, this will lower the firm's cost of capital.

This will only affect the cost of capital if the firm uses CAPM to compute the cost of equity.

Only highly intelligent people are capable of generating creative ideas.

Creative people are born with the trait.

Anyone can become more creative.

Children are more creative than adults.

4. How would you assess the following statement? Consider both the nature of the claim and the source. “Lottery director Mark Michalko said Thursday that allegations that Californians are squandering money they once used for food to buy lottery tickets âare just not correct.’. . . California Grocers Association president Don Beaver raised the issue earlier in the week, saying five supermarket chains had complained that grocery sales dropped about 5 percent after lottery tickets went on sale October 3.” —Sacramento Bee